bitcoin

Bitcoin analysts give three reasons why BTC price below $20,000 may be a ‘bear trap’


Bitcoin (BTC) broke above $19,000 on September 20, a day after falling to its lowest level in three months.

Bitcoin Struggles After Falling Below $20,000

On the daily chart, the price of BTC rose from $18,255 to $19,650. This 7.5% rebound in prices mirrored similar rebound movements seen in the stock market, suggesting that investors have accepted another large rate hike by the Federal Reserve expected on September 20-21.

BTC/USD daily price chart against ACWI and Nasdaq. Source: Trading View

However, opinions differ on the longevity of Bitcoin’s rebound. Independent market analyst Jonny Moe pointed out that BTC’s continued price action is similar to its sideways consolidation moves earlier this year.

In other words, the current Bitcoin price bounces around the $20,000 mark are not a long-term bullish case.

Rudy Takala, former director of Fox News and opinion writer at Cointelegraph, also warns crypto traders to prepare for “darker times” due to deteriorating economic conditions globally.

On the other hand, some analysts believe that Bitcoin is eyeing a strong bullish reversal in the coming times. Let’s take a closer look at the three bullish market outlooks.

Bitcoin prints a “bullish hammer”

Bitcoin’s Sept. 20 candlestick is a bullish hammer, suggesting weakening bearish momentum, according to pseudonymous analyst Trader Tardigrade.

A bullish hammer candlestick forms when the asset drops significantly lower than its opening value but recovers to close near the same level. Traders see the hammer as a sign of bearish rejection, given its history of previous market lows.

Trader Tardigrade applies the same theory to Bitcoin’s September 20 recovery move, noting that its bullish hammer could usher in a reversal.

Pi-Cycle low

Another technical signal that anticipates a strong rebound in Bitcoin is the Pi-Cycle bottom.

Specifically, the open-source indicator tracks two long-term simple moving averages (SMAs): the 471-day SMA and the 150-day EMA. History shows that Bitcoin price hits a low for the market cycle when the 150-day SMA broke below the 471-day SMA.

Meanwhile, the price is heading for a strong bullish reversal in the days before and after the close of the 150-day SMA above the 471-day SMA. Pseudonymous Analyst, Titan of Crypto, Underline that Bitcoin is eyeing a bullish crossover 150-471 SMA by 2023.

BTC/USD Weekly Price Chart with Pi-Cycle Bottom. Source: TradingView/Crypto Titan

“The first crossover happened in July,” he noted, adding:

“The second cross has not happened yet. The reversal may be closer than we think.”

Wyckoff cycle

Aurélien Ohayon, CEO of the investment strategy company XOR Strategy, anticipates Bitcoin will hit $45,000 in early 2023, arguing that BTC price followed the popular Wyckoff cycle pattern.

Related: ‘FED sledgehammer’ will beat BTC and ETH prices again – Bloomberg Analyst

A Wyckoff cycle has four phases: accumulation, markup, distribution, and markdown. After the markdown phase, the cycle repeats with the accumulation phase, which, as Ohayon points out, is the case with Bitcoin’s continued price rebound.

BTC/USD shown in the phases of the Wyckoff cycle. Source: XorStrategy.com

“Bitcoin is entering the final bull phase of the Wyckoff cycle,” the analyst concludes.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.